Which 1866 London bank failure helped trigger a major Victorian stock-market crash?

The failure of Overend, Gurney and Company helped trigger a major Victorian stock-market crash in 1866. The London discount house suspended payments on May 10, 1866, after severe losses and liquidity problems, causing panic across financial markets.

Overend, Gurney had begun as a bill broker and became one of the largest financial institutions in London. Its conversion into a limited company in 1865 was followed by investment difficulties and weakening confidence. When it could no longer meet demands for cash, the failure shocked depositors, banks, and investors.

The panic spread through Britain’s financial system, producing a sharp fall in share prices and a wave of business failures. The Bank of England eventually used its lender-of-last-resort powers after the government temporarily suspended the Bank Charter Act’s reserve restrictions.

This event is often confused with later Barings crises or with the 1720 South Sea Bubble. Overend, Gurney’s collapse belongs to the Victorian banking panic of 1866 and illustrates how a financial intermediary could transmit stress into the stock market.